Ex-Lawyer Donna Guerin Pleads Guilty in Tax-Shelter Case

Sept. 13 (Bloomberg) -- Donna Guerin, a former partner in
the defunct law firm Jenkens & Gilchrist, pleaded guilty in what
the trial judge has called the biggest U.S. tax-fraud
prosecution in history.

Guerin was initially convicted by a jury in May 2011 with
three other defendants of running a 10-year tax shelter scheme
that created more than $1 billion in phony losses. Three of the
convictions, including Guerin’s, were overturned in June after
U.S. District Judge William Pauley found that a juror in the
case lied about her past, including that she was an alcoholic
and a suspended attorney.

Guerin, 52, pleaded guilty today in Manhattan federal court
to one count of conspiracy and one count of tax evasion. Her
plea comes as prosecutors are preparing to retry the defendants
whose convictions were overturned based on the misconduct of the
juror, Catherine Conrad.

“I came to believe that many clients engaged in the
transactions solely because they wanted to eliminate or reduce
tax liability,” she said today in court.

She faces a maximum of 10 years in prison on both counts,
the judge said during the hearing. Sentencing is scheduled for
Jan. 11. She has agreed to pay $1.6 million in penalties.

Her defense lawyer, Mark Rotert, declined to comment after
the proceeding.

Tax Shelters

Guerin said today she worked on tax shelters with Paul
Daugerdas, also a defendant in the case, while the two were
lawyers at former Chicago-based firm Altheimer & Gray. The two
joined Dallas-based Jenkens & Gilchrist in 1998, she said, and
continued their work in helping clients shelter income.

Guerin admitted to helping advise clients on how to conduct
complex transactions that allowed them to wipe out financial
gains. Guerin said she also provided opinion letters to her
clients helping them assert that the deals were legitimate.

The jury, including Conrad, returned guilty verdicts on May
24, 2011, against Guerin and Daugerdas; Denis Field, the former
chief executive officer at accounting firm BDO Seidman LLP; and
David Parse, who worked for Deutsche Bank AG unit Alex. Brown.
Craig Brubaker, a second former Alex. Brown accountant, was
found not guilty.

Pauley threw out the convictions of Guerin, Daugerdas and
Field after finding that Conrad, Juror No. 1 in the trial, had
lied repeatedly about her background in an effort to make
herself “more marketable” as a juror.

New Trial

Pauley, who found that Parse’s lawyers failed to reveal
information they had about Conrad before the jury delivered its
verdict, refused to grant him a new trial. Parse is seeking to
overturn his conviction by claiming his lawyers, from the New
York firm Brune & Richard LLP, provided him with inadequate
legal help.